Gender Action Mainstreaming for Empowerment to Change

financial products

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The design of financial products products, for example. interest rates, repayment schedules, application procedures, loan size and purpose and savings conditions are often seen as a technical banking issue decided from above by programme staff.

Very little attention has been given to gender equity or empowerment questions.

However, evidence indicates that women's ability to use micro-finance to increase incomes and control these incomes are also affected by design of financial products: types of collateral requirements, modes of disbursal, loan size and timing, types of savings product and so on.


Participatory Market Research

 It is now generally accepted that participatory market research and “knowing your clients” is good business practice. Many MFIs, including Grameen Bank, have conducted client research, which has significantly increased outreach and sustainability. The capacity-building organisation Microsave has developed a range of participatory market research tools. Many microfinance organizations have been trained in and use variants of these.

These can be adapted to:

  • identify differences between women and men through gender disaggregation of research process and information
  • identify ways in which products can be designed for empowerment and to increse gender equity
(see for example the FALS methodology)

However:

  • It is likely in many cultures that female facilitators would be needed to work with women.
  • There is insufficient emphasis on the need to differentiate between designing products which (vulnerable) clients can be persuaded to buy, and those which would really benefit them.
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Savings and pensions

In designing savings facilities, a number of key issues must be considered, including: whether savings are compulsory or voluntary, levels of initial deposit required, ease of withdrawal confidentiality, accessibility of the provider and interest rates.

It is likely that many women will require a range of different types of savings provision for different purposes.

Compulsory savings systems are one of the few ways for some women to protect income against the demands of husbands and other family members. If savings are only voluntary, women may be less able to oppose the demands of other family members to withdraw them.At the same time they are likely to need some access to liquid cash for emergencies from a provider who is easily accessible.

In many parts of Africa, for example, where in-laws are likely to take the wives’ as well as husband’s property when he dies, women’s ability to have confidential savings accounts may be a crucial and necessary means of security for the future. Confidentiality may also be important to avoid witchcraft or jealousy from other women. On the other hand public knowledge of savings may in some circumstances increase social status and access to credit.

It is also likely that long term savings products or pensions would decrease women's vulnerability in their old age and thus have a generally strengthening effect on their bargaining power.

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Loans and leasing products

The design of loan products can significantly affect the degree to which clients are able to use and benefit from loans, including: 

  • eligibility and collateral requirements (who is eligible and risks involved)
  • application procedures (how complex they are), repayment schedules (grace periods and whether interest calculation is on fixed rate or declining balance)
  • loan size and how appropriate this is to the levels of investment needed
  • whether loan products are designed for specific purposes or activities
Each of these decisions has gender dimensions relating to women’s gender specific activities and power relations within the household.

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 insurance

Gender specific constraints can present particular challenges for providers:

  • Women’s lower incomes make them less able to afford insurance payments.
  • In many cultures, women are less literate and physically mobile than men, and women may therefore be less able to understand policy conditions and pursue claims unless these factors are taken into consideration.
  • Insurance policies often explicitly exclude health concerns that apply to large numbers of women (pregnancy is one example) because they present too great a risk for insurers.
  • There are also gender challenges with insurance for men. For example in polygamous households which of the spouses should receive or pay for a husband’s life insurance and/or which spouse would benefit from other types of insurance which husbands may take out on household property and/or health insurance.
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some Products for empowerment

It is clear that even individual women need a range of different types of financial product for different purposes, including but by no means only:

  • repayment schedules and interest rates to maximise contribution to increasing incomes
  • registration of assets used as collateral or purchased with loans in women's names or in joint names and applicable in both loans for women and men
  • incorporating clear strategies for women's graduation to larger loans
  • loans for new activities, health, education, housing
  • range of savings facilities which include confidential higher interest deposits with more restricted access to enable them to build assets protected from demands of other family members
  • loans to reinforce and strengthen male responsibilities for household well-being, including that of their wives and daughters e.g. loans for daughter's education and for a daughter to take with her on marriage.

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